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Locals Worry About Potential Default

PLEASANTVILLE, N.Y. – Patricia Dwyer, the Pleasantville village administrator, says is not worried about the immediate effect in the village of Pleasantville if Congress fails to reach an agreement on the debt ceiling and the federal government goes into default.

"I don't think we'll see any immediate effects, but I'm afraid that we may see them as they trickle down," Dwyer said.

According to Dwyer, these effects can take place in the long term due to future consumer spending, or lack thereof.

"Local shops and stuff can be affected because consumers won't be as confident in their spending," Dwyer said. "In times like this, people don't really know whether to spend their money and put it back in the economy or save it and often times they don't know where to invest it, and that can effect things like the prices of goods and services, real estate, and stuff like that."

Lewis Gutterman of Hartsdale, said he was worried about Social Security and what cuts may occur if the government defaults.

"I'm not sure what's going to happen or what the cuts will be, I'm not even sure if the government knows yet either," Gutterman said. "I don't think that's going to happen now, I think that it may be pushed out in the future for young people who are going to have a much tougher time with it.

If Democrats and Republicans continue to engage in a stand-off as the Tuesday deadline approaches to raise the debt ceiling, it could mean some dire consequences for local governments and their constituents, but one local representative said Social Security should be safe.

"The treasury will still be able to pay our sovereign debt obligations," said Congresswoman Nan Hayworth (R –Mount Kisco), of New York's 19th district.

The debt obligations Hayworth is referring to includes treasury bonds, Social Security, and Medicare.

Hayworth also noted that while everyone is focused on the Tuesday deadline, she said the standoff could go well into August

However, if those days do pass without any resolution, Hayworth said the local governments and organizations in Westchester County will most likely to feel the pinch with things such as Community Development Block Grants. She said the treasury department would have to prioritize its payments and items such as Social Security, Medicaid and military paychecks would likely be at the top of the list and not grants.

"Some might have to give an IOU to their local contractors if they're willing to take one," she said.

Dwyer said that this will not be the case for the Village Government of Pleasantville, as they are not affected much by federal funding. However, that is not the case for all aspects of the Village.

"[The new debt ceiling] could be a concern for the school districts and what they are able to do, because they do receive a substantial amount of federal funding," Dwyer said.


Bob Dumas also contributed to this article.

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